So the hail storm may blow in and destroy your roof on your home. Now what?
Ever had the water heater give out and the most inopportune time and leave your house flooded? It's not the happy scenario you pictured when you took the keys of home ownership is it?
You file a claim against your home insurance but wonder how many facets to this claim do I really know about?
The main facet to always know is your deductible.
But though deductible is fun to say, do you really know what it is?
In a nutshell, a policy deductible equals the amount of the claim you are responsible for paying when it comes to the cost to replace or repair what is damaged or lost.
But is it straightforward to figure this out on the policy in front of you?
How do insurance companies figure out what portion you will cover?
Let's take a look how the determine the money and then how it gets applied toward your claim.
This is figured two different ways:
The Flat Dollar Deductible
Flat dollar deductible is a simple dollar amount, say $1,000, which gets paid toward the cost of repairing your home. If you want to think of like the collision coverage you have on your car (but for your house), then you are on the right track.
The Percentage Deductible
This amount is determined by a percentage of the dwelling amount listed on your homeowners insurance policy. For example:
- Dwelling amount = $250,000
- Deductible percentage = 1%
- Your responsibility to pay = $2,500
Simple, right?
But what about applying this?
You may remember what we've said before about split deductibles due to the vast range of land our great state covers. From the coast to the panhandle, the state is diverse, even requiring at least two line items for deductibles.
- Wind + Hail - this deductible applies to claims when hail, tornadoes or straight line wind causes damage. We tend to think of these as roofing claim in the North Texas area, but the rest of your home can be impacted as well
- Hurricane or Named Storm - if you moved to Texas to partake of living near the Gulf of Mexico, you're likely to become familiar with this deductible
- All Other Perils - all other covered events not falling into the previous two buckets fall here. Fun fact, next to wind and hail claims, water discharge wins for the most claims in Tarrant county.
So knowing the types of deductibles that can be split, who decides which of them get used?
The insurance company in conjunction with the current insurance market.
You'll find the Wind and Hail and Hurricane deductibles almost always equal a percentage deductible of 1% with All Other Perils usually being a flat dollar or percentage.
Warning: If you are currently in a 3% deductible, get ready to buy your roof out-of-pocket. Your insurance agent shouldn't have treated you that way.
That is "deductibles in a nutshell" (say that five times fast!).
If you work with Insurance For Texans, an independent insurance agency, we can help you find the deductible that will maximize your coverage and value.
You want a deductible that works for you and your Grapevine home insurance policy.
We'll help you find it.
